The Payoff to the Holder of a Call Option Is

question 12

Multiple Choice

The payoff to the holder of a call option is ________.

• A) strike price minus stock price if stock price is more than strike price
• B) strike price minus stock price if stock price is less than strike price
• C) stock price minus strike price if stock price is less than strike price
• D) stock price minus strike price if stock price is more than strike price

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Definitions:

Sales Tax Payable

The amount of sales tax collected from customers that a business owes to the government.

Sales Tax

A tax imposed by a government on the sale of goods and services.

List Price

The manufacturer's suggested retail price of a product before any discounts or allowances.

Purchases Discount

A reduction in the amount payable by a buyer to a seller, if the payment on the purchase is made within a specified period.